Axiata Group Berhad, one of Asia’s largest telecommunications group in Malaysia, entered into a definitive agreement with Mitsui Co. Ltd. and its affiliate to sell 10 percent of its interests in Smart Cambodia at $66 million.
Post-transaction, Axiata will continue to hold a controlling majority interest in Smart with an 82.5 percent stake, according to the company’s statement.
“The total transaction consideration of $66 million is based on an equity value of $724 million after factoring additional cash received from dividends as part of the transaction structure,” it said.
“Under the agreement, Axiata has also granted Mitsui a call option to acquire an additional 10 percent interest, exercisable within 12 months from the completion of the transaction. The transaction is expected to close by end of this month,” it added.
Thomas Hundt, CEO of Smart Axiata, said, “Smart is extremely pleased to welcome Mitsui as a strategic partner. We see this as an affirmation of Smart’s position as leading mobile operator in Cambodia.”
“Smart’s unique strength in data and digital leadership, network coverage and value-added offerings will be greatly enhanced by Mitsui’s involvement as Smart continues to evolve towards a digital lifestyle brand,” added Mr Hundt.
According to the statement, the deal with Mitsui meets the group’s portfolio management strategy and brings financial value for Axiata and its shareholders, with the proceeds intended for general corporate purposes and repayment of existing debt in its balance sheet.
Tan Sri Jamaludin Ibrahim, president and group CEO of Axiata, said the partnership with Mitsui would support the growth efforts of Smart, particularly in the areas of digital services and internet of things (IoT) and the vision of becoming a “new generation digital champion”.
The IoT is expected to offer advanced connectivity of devices, systems, and services that goes beyond machine-to-machine communications.
“With Mitsui in the fold, Smart will be in a position to offer enhanced digital services that would leapfrog Cambodia’s digital economy. We look forward to leveraging on synergies from this strategic partnership,” Mr Jamaludin said.
In a call to Asean leaders to fully embrace digital technology, Mr Jamaludin told the recent World Economic Forum on Asean that by 2025 a digital revolution could transform daily life in Asean.
“We need to leapfrog and pursue a broadband revolution that will accelerate innovation in mobile financial services, e-commerce and connected cities,” he said.
From 2008 to 2016, Smart spent $967 million in capital and operating expenditure in Cambodia. A further $80 million in capital expenditure has been committed for 2017, primarily for 4G network expansions.
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